When it comes to treasury market offerings, banks have historically started wholesale and retail lockbox businesses. They were able to provide these services to their corporate customers, which effectively outsourced all of the work around receiving payments: that is, opening envelopes, scanning payments – as well as remittance information – and then making a deposit at the bank.
“For a long time, that’s been a successful model,” Tom Berdan, chief marketing officer at startup DadeSystems, told PYMNTS.com in an interview. But, as payment types and payment channels have grown to become more electronic, the amount of lockbox payments is declining rapidly.
In one case, a payer may send a payment through a supplier network, such as AvidXchange. In turn, a company may receive a deposit in their bank account a couple of days later and have to pull the remittance information from the supplier site. And in another case, which Berdan said is more frequent, payments will come from an accounts payable system within the payer. Most commonly, those payments are sent by automated clearing house (ACH). The remittance detail, however, is typically sent separately through an email or an email with an attachment.